Mediterranean 2030: a common vision of the region’s future

In April 2009, IPEMED worked with Euro-Mediterranean organizations (CARIM, CIHEAM, FEMISE, OME) and public and private forecasting institutions from the Mediterranean (about 30 organizations from 15 countries) on an extensive foresight project aimed at putting together a common vision of the Mediterranean in 2030. Together, they came up with several scenarios.

To achieve the regional convergence scenario championed by IPEMED, the following 9 recommendations were put forward:

1. Invest in human capital by encouraging mobility (authorize temporary migration for services under contract and projects co-funded by the UfM) and qualifications (create a common base, a Euro-Mediterranean network of vocational training courses and establish recognition-accreditation of skills and diplomas; ErasmusMed, etc.).

2. Accelerate the transfer of knowledge, skills and technology by (i) encouraging the emergence of Euro-Mediterranean competitiveness and research clusters in sectors with high growth or high employment (information and communication technologies for services, farming and energy efficiency techniques, etc.); (ii) narrowing down location choices to the region: this could involve setting up a system of regional preferences that goes beyond free trade and is based on social, health, and environmental quality criteria, thus helping to accelerate the transfer of capital and know-how.

3. Create a common institutional area accompanied by financial transfers, advanced status receiving funds and based on the philosophy of belonging to a domestic market (involving the progressive establishment of the four freedoms of movement for goods, capital, services and people), and pursue discussions on accession for EU candidate countries.

4. Engage a Mediterranean certification process, initially covering services and agriculture, with a Mediterranean label guaranteeing health quality (establishment of a health agency) and environmental quality for farming, and skills quality for the provision of services.

5. Select UfM co-funded projects based on job creation potential and/or energy restraint.

6. Create a Mediterranean environment fund aimed at strengthening the capacity to adapt to climate change in South and East Mediterranean Countries and the Balkans. The fund would also finance infrastructure projects for transporting renewable energy and for public transport as an alternative to roads; clean development projects to reduce greenhouse gas emissions; and projects for managing water demand and energy efficiency, particularly in the building sector.

7. Set up a Mediterranean investment bank, based on the same principles as the European Investment Bank, and designed to encourage funding for SMEs, which are key to the creation of wealth and jobs.

8. Extend transport networks in the South Mediterranean to facilitate South-South commercial exchanges, with a particular focus on multimodal transport to optimize logistical costs.

9. Draw up a common food security policy (insurance for agricultural risk, security stocks and emergency intervention systems) and a rural development policy (tangible and intangible infrastructures for industries, managerial and technological training courses).

Given the obvious complementary features (e.g. collective preferences, active forces, natural possessions, and the production of goods and services) coupled with challenges that countries cannot tackle on their own (e.g. insufficient suitable jobs, climate change and preservation of natural resources, food crises, migration), several scenarios for the future can be drawn up.

 “Mediterranean divergence” scenario

A continuation of past trends (i.e. European growth rates under 2% per year, close to 2-3% in the South and East Mediterranean and the Balkans) will result in countries’ uneven insertion into the global economy. Growth led by emerging countries will strengthen competitiveness to the detriment of purchasing power and demand, which will be advantageous to competitive countries that have already started catching up (Croatia, Turkey and Tunisia), but widen the gap with other Mediterranean countries (Algeria, Egypt, Lebanon and Albania). There will be winners and losers at national and regional level, and a significant two-way split between economies and territories.
Activity and employment rates will rise in a very unequal way, and the duality of work markets will remain strong in North and South, deepening inequalities between elites and unqualified workers. The Euro-Mediterranean process will move forward in terms of opening up trade and agriculture, but the only services to open up will be those that underline a selective labour force based on qualification levels. The pressure to migrate will be fuelled by the losers of modernization-globalization, in particular young graduates.

The Mediterranean will see its economy-world transit position reinforced with greater impacts in terms of pollution, loss of biodiversity and the development of artificial coastlines. The rising demand for energy and food, coupled with urbanization, will accentuate environmental pressure in the South and East Mediterranean. The pressure on water resources will become unsustainable and the contribution to climate change will be a concern.

Regarding agriculture, productivity gains and pressure on farmland will lead to the disappearance of subsistence crops. The decline of Euro-Mediterranean agriculture will go hand in hand with high penetration of suppliers from the rest of the world (meat, cereal), while strictly Mediterranean products (fruit and vegetables, olive oil, wine) that have not been accredited with a label will have to compete with produce from afar (e.g. Chile, Australia, Brazil and China).

“Mediterranean crisis” scenario

The 2008 crisis could make this situation darker still, leading to bottom-up convergence and the marginalization of Mediterranean countries made fragile by the sovereign debt crisis in the north and uneven political transition in the South. The Latin European crisis will lead to withdrawal from trade and investments in the neighbouring Balkans and the southern Mediterranean. North Africa will take the brunt of this withdrawal (due to its strong commercial dependence on Mediterranean Europe), while the Mashreq, Turkey and the Balkans will manage to limit the impact thanks to transfers of capital from North European countries and emerging countries keen to invest in a low-cost, high-yield zone. All of those countries catching up with Europe will reach the income levels of Mediterranean Europe (income per capita in Turkey and Serbia will reach 80% of Portugal’s in 2030), but the price to pay will be significant European divergence (Germany will overtake France in income per capita, GDP per capita in Slovenia will be higher than in Spain).

This crisis context will not favour Euro-Mediterranean institutional integration and will threaten European cohesion. The Euro-Mediterranean will make no progress, the UfM will lack projects and the opening up of services will be hindered by fears of social dumping. Sub-regional trade will suffer from the instability of the Arab Mediterranean, and its share of trade, already low, will shrink further.

Southern European countries will see qualifications go down in their labour force and suffer from a definitive loss of human capital that will translate into a stagnating, perhaps falling employment rate, in contrast to a relatively stable rate in northern and eastern Europe. The employment rate in Maghreb countries will increase less than currently, with activity rates remaining lower than 50% in general, an average drop of several points. Migration pressure will remain high.
 
Environmental pressure will increase, mainly due to the low progress made in saving energy (Arab Mediterranean and the Balkans), the absence of renewable energy development, and the maintenance of fossil fuels. Regarding agriculture, the dual system of intensive farming for export and underequipped subsistence farming will persist in the absence of production gains. Conflicts of use for water, food dependence and rural poverty will intensify.

 “Mediterranean convergence” scenario

Another outcome is possible. Subject to shared, proactive political action by countries in the region, Mediterranean convergence can be envisaged, coupled with generally higher growth bringing more jobs. To achieve this will involve encouraging geographic redistribution of production, sharing added value, promoting interdependence, redistributing wealth, and converging standards, in a regionally integrated system benefiting from the four freedoms put in place by the European Union (circulation of goods, capital, services and people). This kind of scenario supposes that the Arab Mediterranean’s political transition has not only liberated energy in the South, but that it has resulted in greater convergence with Europe, a rapprochement founded not just on economic benefits, but on a political, value-based community.

In this context, internal growth drivers will lead to increased productivity and employment, and a convergence in income that could reach per capita levels above USD 10,000 by 2030, except for in Mauritania. This growth, which will be fairer in terms of wealth redistribution, will allow the South and East Mediterranean and the Balkans to develop domestic demand from which Latin Europe, and to a lesser extent, the whole of Europe will benefit. This impetus will considerably increase sub-regional commerce, opening up opportunities for emerging and deep-seated markets. Trade in the Middle East and the Maghreb will develop all the more if crossed exchanges with the Gulf States supplement its trade with Mediterranean and European neighbours. Turkey will become an indispensable interface and a hub of Euro-Mediterranean trade.

Activity rates in South and East Mediterranean Countries and the Adriatic countries will move closer to those of Europe, where migration, more circular than in the past, will make up for labour shortages and fuel consumer markets. In the South, the informal market will decrease considerably (an average of nearly ten points), unemployment rates will drop below 9%, and over 2.6 million jobs will be created each year, fostering social stability. In addition, the job perspectives offered in South and East Mediterranean Countries and the Balkans will be sufficient to stem the brain drain. Migrants will consider returning home and migration will take more circular, qualifying forms.

Regarding energy, the convergence scenario allows greater progress in energy efficiency and a significant development of renewable energy thanks to regional cooperation and technology transfers.  Energy savings measures will be put in place, not just in EU countries, but in the South as well. However, despite efforts, the impact of growth on climate change will remain a concern: from 2020, SEMCs’ CO2 emissions in the atmosphere will overtake those of North Mediterranean countries, despite the fact that energy consumption per capita will remain lower.

In the context of accelerated industrialization and development in SEMCs and the Balkans, agriculture’s share of GDP will drop steeply. The rural exodus will nevertheless be contained due to the development of non-agricultural rural activities and an agri-food transformation chain that will create industrial and service-related jobs.

A variation of the convergence scenario

This convergence scenario could be led, not by increased European pro-activeness, but by new economic impetus in the South that could take two forms: it could either have a pull effect on EU member states’ economies that would encourage their political pro-activeness regarding the region; or it could provoke a relative distancing between an integrated south on one side, and the European Union on the other. This scenario, which was unlikely at the end of 2010, is becoming more probable in the wake of the Arab uprisings.

Complementary factors to make the most of in the Mediterranean
Countries in the Mediterranean could make the most of several complementary factors. First, is the (quantitative) interdependence of active forces, with an ageing Europe where a probable decline in the number of working-age people will affect potential growth, and the South and East Mediterranean, where a generation of young people are entering the labour market in greater numbers and with higher qualifications. Yet, although the supplementary workers on one side will not automatically fill the gaps on the other, due to partitioned labour markets and restrictive migration policies, greater Euro-Mediterranean mobility could help make up sectorial labour shortages (especially in human services, public building works, hotels and restaurants) and reinforce workers’ qualification levels and adaptation.

2030 will see even greater interdependence between natural resources, energy resources (South and East Mediterranean Countries supply fossil energy and especially renewable energy) and possibly agriculture (Europe eats more cereals and meat, with relatively abundant arable land and water resources, and farming has become a marginal activity; the South has significant rural activity but Mediterranean production is threatened by water stress, urbanization and climate change). However, once again, resources on one side will not automatically satisfy the needs of the other side in a global market where emerging powers tend to get hold of the rare natural resources. The members of the consortium agree that, whatever the availability of resources, a supply-based approach must be replaced by a demand-based system when it comes to energy, the environment and agriculture. This will involve fostering the creation of solvent markets and ensuring that economies catching up with Europe do not find themselves in a situation of impoverishing sub-contraction, driven by wage differences alone.
Lastly come complementary goods and services. This domain does not just involve promoting the comparative advantages of each side, it also means reinforcing their complementary nature, since there are no services without goods, and it is services that increase the added value of goods that are mass produced cheaply around the world.  

Common challenges

Alongside complementary factors, the region must tackle common challenges.

The most important is employment, since Euro-Mediterranean economies are not creating sufficient jobs in both the North and South Mediterranean. In the North, this hinders potential growth, and in the South, given the demographic perspectives, the lack of jobs could translate into frustration and the desire to emigrate. Mediterranean economies will have to deal with more pronounced climate change and scarcer natural resources than in other parts of the world, even although their contribution to the phenomenon has been lower. To do so, they will need to encourage more sustainable development that uses less energy, calling for technological transfers and competences that are currently mainly European, champion eco-activities and a more rational use of natural resources; all of which creates market opportunities and possibilities for North-South and South-South cooperation.

The likely degradation of agro-climate conditions also obliges countries to rethink their agricultural policies. This presents another new opportunity to restructure, within a Euro-Mediterranean framework, so as to ensure food security and inhabitants’ health and reinforce agricultural systems that generate jobs, local revenue and quality products that respect the environment. This development will help to increase the added value of Mediterranean products, accelerate North-South agricultural investment, make industries more professional and farmers more qualified.

The last common challenge facing countries in the region is that of “Mediterranean migration”, which is likely to continue depending on push factors (demographic and income differences between the two sides) and pull factors (labour shortage in Europe and the desire to attract qualified labour, high unemployment in the South). Although migration is an undeniable factor in development and social, economic and cultural integration, a balance needs to be struck between brain drain and brain gain. For this reason, a policy of Euro-Mediterranean mobility that facilitates circular, “qualifying” migration, alongside migrant integration policies, could only be beneficial to the region.
National forecasts produced by countries in the region (Morocco 2030, Tunisia 2030, France 2025, Egypt 2025, Spain’s territorial foresight vision, Greece’s strategic planning, Jordan Vision 2020), and sectorial forecasts done by Euro-Mediterranean organizations (CIHEAM’s Mediterra, IPEMED’s Mediterranean 2030, Plan bleu 2025, OME’s annual energy projections) have underlined the challenges facing the region.

This made it easier for consortium members to select four cross-cutting themes: food security and rural development; employment and human capital; mobility and migration; and energy and climate change.

In parallel, a study of the possible forms of regional integration was also initiated.

The Mediterranean integration of the future will be influenced by actors outside the countries’ borders (e.g. Gulf States, United States, possibly China and major emerging countries). It will be highly dependent on both the impetus for reform in South East Mediterranean Countries, and the future of European Union construction and its expansion. Therefore, creating regional integration scenarios involves considering endogenous and exogenous factors, envisaging possible ways of taking things further while preventing the risks identified in the thematic forecasts, and setting out the potential development stages.

Lastly, unions of societies and countries are based on shared values that encourage them to share risks and extend solidarity. The consortium also undertook a debate on the values in the name of which Mediterranean integration could take place. These cross-cutting reflections resulted in three scenarios for the future, which have been validated by partners from the North, South and East Mediterranean, who thus share a common vision of a desirable Mediterranean future.
Four cross-cutting themes provide the focus of this project: food security and rural development; employment and human capital; mobility and migration; and energy and climate change. They were then integrated into the regional scenarios drawn up as part of the project.

Employment and human capital
Sectorial forecast coordinated by Frédéric Blanc, Delegate-general of FEMISE.

The objective of this study was partly to look at the development of human capital in the Mediterranean in 2030 taking past evolutions into account, and partly to establish potential figures for employment and unemployment, initial and vocational training and human capital, and looking at how they correspond to economic requirements and their participation in potentially higher growth. Lessons were also learned in terms of the evolution productivity from South and East Mediterranean countries in 2030.

Population, mobility and migration
Sectorial forecast coordinated by Philippe Fargues, Director of CARIM, in collaboration with Hervé Le Bras, Director of Studies at INED and lecturer at EHESS.

The objective of this study was partly to explain migration phenomena in the Mediterranean, including circular migration, and partly to establish potential figures for migration and mobility in the Mediterranean in 2030, taking into account demographic constraints, changing migratory profiles, and uncertainty regarding geopolitical and political migration. The implications of these developments on the labour market in both North and South, as well as on the volume and allocation of migrant transfers, were also analyzed.

Energy and climate change
Sectorial forecast coordinated by Houda Allal, Director of Strategy at OME.

This analysis looked at the impacts of environmental degradation (especially climate change), economic and demographic growth, and lifestyle changes following increased income.  OME also established potential figures for energy production and demand in the Mediterranean in 2030, and identified the implications for supply security (taking into account international developments, in particular on price setting) and the consequences of these developments on economic activity, revenue and employment.

Food security and agriculture
Sectorial forecast coordinated by Vincent Dollé, Director of IAMM, member of the CIHEAM network.

This study focused on climate change issues and their potential impact on agriculture, as well as health, nutrition and economic development issues.

Four cross-cutting themes provide the focus of this project: food security and rural development; employment and human capital; mobility and migration; and energy and climate change. They were then integrated into the regional scenarios drawn up as part of the project.

Employment and human capital
Sectorial forecast coordinated by Frédéric Blanc, Delegate-general of FEMISE.

The objective of this study was partly to look at the development of human capital in the Mediterranean in 2030 taking past evolutions into account, and partly to establish potential figures for employment and unemployment, initial and vocational training and human capital, and looking at how they correspond to economic requirements and their participation in potentially higher growth. Lessons were also learned in terms of the evolution productivity from South and East Mediterranean countries in 2030.

Population, mobility and migration
Sectorial forecast coordinated by Philippe Fargues, Director of CARIM, in collaboration with Hervé Le Bras, Director of Studies at INED and lecturer at EHESS.

The objective of this study was partly to explain migration phenomena in the Mediterranean, including circular migration, and partly to establish potential figures for migration and mobility in the Mediterranean in 2030, taking into account demographic constraints, changing migratory profiles, and uncertainty regarding geopolitical and political migration. The implications of these developments on the labour market in both North and South, as well as on the volume and allocation of migrant transfers, were also analyzed.

Energy and climate change
Sectorial forecast coordinated by Houda Allal, Director of Strategy at OME.

This analysis looked at the impacts of environmental degradation (especially climate change), economic and demographic growth, and lifestyle changes following increased income.  OME also established potential figures for energy production and demand in the Mediterranean in 2030, and identified the implications for supply security (taking into account international developments, in particular on price setting) and the consequences of these developments on economic activity, revenue and employment.

Food security and agriculture
Sectorial forecast coordinated by Vincent Dollé, Director of IAMM, member of the CIHEAM network.

This study focused on climate change issues and their potential impact on agriculture, as well as health, nutrition and economic development issues.
The “Mediterranean 2030” consortium regularly brought together around thirty organizations from more than a dozen countries in the Mediterranean. The following organizations were some of the most actively involved:

Albanian Council on Foreign Relations (Albania)
Arab Reform Initiative
Planning and Information office of the Ministry of Foreign Affairs (Bosnia - Herzegovina)
Centre d’Analyse Stratégique (France)
Centre d’Etudes Appliquées et de Prospective (Algeria)
Centre for future studies (Egypt)
Centre for Mediterranean Middle East and Islamic studies – University of Peloponnese (Greece)
Centre Mauritanien d’Analyse des Politiques (Mauritania)
CeSPi, Centro Studi di Politica Internazionale (Italiy)
Commissariat Général à la Planification et à la Prospective (Algeria)
Euro Mediteranski Forum (EMEF) (Croatia)
Ecole des Hautes Etudes en Sciences Sociales (France)
Haut Commissariat au Plan (Morocco)
IEMed (Spain)
Institut Royal des Études Stratégiques (Morocco)
Institut Tunisien de la Compétitivité et des Etudes Quantitatives (Tunisia)
Institut Tunisien des Études Stratégiques (ITES) (Tunisia)
Laboratoire d’Economie des Transports (LET) (France)
Ministry of sciences, education and sports (Croatia)
Ministry of foreign affairs and European integration (Croatia)
Observatoire Universitaire de la Réalité Socio-économique (Lebanon)
“Mauritania vision 2030” project (Mauritania)
State Planning Organization (Turkey)
Mohammed V Rabat-Agdal University (Morocco)
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